The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Happy New Year, Manitoba! Congratulations on making it through another taxing year. As you sit at your kitchen tables poring over the holiday bills, donÕt be too discouraged Ð youÕre getting a tax break! ThatÕs right Ð all of that money you charged up will be a bit easier to pay off when you file your tax return this year. Among this list of goodies both the federal and Manitoba governments are bestowing upon us (read: giving us our money back!) is a one-point GST reduction, an increase to the basic personal exemption at both levels of government and a reduction to the low and middle tax rates. Federally, the bottom tax rate fell from 15.5 to 15 per cent Ð but donÕt forget, the Conservative government raised it, then reduced it again. An increase to the basic personal exemption is a tax cut for all Canadians, regardless of income with the exemption rising from $8,929 to $9,600, with a further increase to $10,100 by 2009. The added bonus with these tax changes is they are retroactive to 2007, meaning you can expect a refund when you file your 2007 taxes. Ottawa has also offered up some relief to families with a new $300 child tax credit and increase to the spousal exemption. The Canadian Taxpayers Federation (CTF) estimates, on average, these savings to be close to $230. That may not sound like a lot, but when you factor in a one-point GST cut, overall savings are closer to $400. In the case with the GST, of course, the more you spend, the more you save. Not to be outdone, the Manitoba government is also offering some relief. Although previously announced in 2007, the NDP government will be taking a little bit less out of your pocket in the next year with a $200 increase to the basic personal exemption and a reduction to the middle tax rate from 13 to 12.75 per cent. These changes came into effect on January 1, 2008. But before you put a match to your credit card bill, the Manitoba savings wonÕt be as significant as they could be because the province has yet to index tax brackets to the rate of inflation. Much of the tax relief will be eroded by bracket creep. The CTF estimates the provincial savings to be around $80/year; had our tax brackets been indexed, savings would have been closer to $100. The upside of all these tax changes is that to some degree, governments recognize we are overtaxed. The changes are very modest, but our politicians deserve some credit for at the very least moving the yard sticks in the right direction.
